This section aims to provide a brief overview of certain available credit lines integrated into the mutual guarantee system. The content is based on the information available at the following address, where further developments can be found on the aspects mentioned below: https://www.spgm.pt/pt/catalogo/linha-de-apoio-a-economia-covid-19/.

The European Commission has approved the support of financing through mutual guarantees, benefiting from public counter-guarantee. With respect to the State aid, additional information can be found under "Impact on granting the State aid to the companies".

 

What credit lines are available within the COVID-19 Economy Support Line?

The following credit lines are available under the COVID-19 Economy Support Line:

  1. COVID-19 Support to Economic Activity - Micro and Small Enterprises;
  2. Support line to Medium Enterprises, Small Mid-Caps and Mid-Caps.

In general, between 80% and 90% of the financing is guaranteed by the mutual guarantee system. Each line has its own conditions, and the interested party should consult such conditions (including maximum amounts per company, eligible/ineligible operations, deadlines, the relevant Portuguese Classification of Economic Activities (CAEs), etc.):

Among other costs and charges, the transaction will involve the payment of a guarantee commission, the value of which varies according to the time frame and guaranteed amount.

Additionally, Council of Ministers Resolution no 33-A/2021 approved the launch of a credit line for medium and large tourism sector companies, in the global amount of (euro) 300 000 000.00, with the possibility of 20% of the granted credit being converted into non-refundable credit, to be promoted by Banco Português de Fomento, S. A.

 

Who can access these lines of credit?

Medium Enterprises, Small Mid-Caps and Mid-Caps can benefit from the Support Line to Medium Enterprises, and Micro and Small Enterprises can benefit from COVID-19 Support to Economic Activity - Micro and Small Enterprises, in each case, as defined/certified under the applicable legal terms. The enterprises must be located in national territory and develop an activity listed under the Activity Code List and meet the eligibility criteria set forth in the Disclosure Document (which can be found in the above-mentioned link).


The following criteria are applicable for each company:

  • positive net worth on the last approved balance sheet (a requirement that presents some exceptions / possibilities of remedy)
  • no unregulated incidents with the financial system, and to have the tax and social security situation regularised
  • not to be considered as companies in difficulty on 31 December 2019 (the current difficulties must result from the worsening of economic conditions following the COVID-19 epidemic)
  • have no approved or executed financing operation in Mutual Guarantee Schemes, within the context of a mutual guarantee credit line created to support enterprises in resuming normal activity in face of the COVID-19 outbreak (there being an exception to this criteria, when credit lines and approved but not yet executed);
  • to register a sharp reduction of at least 40% in invoicing, compared to the monthly average invoicing in the period from March to May 2020, or compared to the monthly average invoicing in the same period of the previous year (there being an exception to this criteria for companies whose activity started less than 12 months ago);
  • not to be considered as (i) entities having their head office or place of effective management in countries, territories or regions with a clearly more favourable tax regime under the applicable law, or (ii) companies controlled by entities, including trust structures of any nature whatsoever, having their head office or place of effective management in countries, territories or regions with a clearly more favourable tax regime under the applicable law;
  • submit a statement in which the company (i) assumes the commitment to maintain permanent jobs until 31 December 2020, as compared to 1 February 2020, declaring not to have advance or will advance, during this period, processes of collective dismissal or dismissal for job extinction, or (ii) evidences that it is, or may be, subject to the lay-off regime, as approved by the Social Security.

The forms to prove the above items are also available at the above address.

 

What process should I follow?

To access theCredit Line, the company shall contact one of the registered banks and deal with its application forms and documentation. The bank's decision to approve or refuse shall be communicated within 5 working days from the date of application.

Once the bank has approved the operation, it will articulate the procedure with the mutual guarantee system, within short deadlines.

After approval within the mutual guarantee scheme, the financing operation shall be contracted with the company within 30 working days from the date of sending this approval to the bank.

 

Instruments to support the enterprise working capital

Through Council of Ministers Resolution no. 101/2020, of 20 November the Government launched, new instruments to support enterprise working capital.

In this context, the Government established the Liquidity Incentive Scheme (Programa APOIAR), further regulated through Ordinance 271-A/2020, of 24 November 2020 of theMinister of State for the Economy and the Digital Transition (which can be found at https://dre.pt/application/file/a/149418251) and financed by the European Structural and Investment Funds (ESIF) through the Operational Programme for Competitiveness and Internationalisation (COMPETE 2020) and by the refund of other European aid schemes which are now terminated. Programa APOIAR aims to mitigate the negative impacts on the economic activity caused by the public health protection measures related to the COVID-19 pandemic, by promoting liquidity, operational efficiency, maintenance of employment and the short-term financial health of these enterprises.

Given the aggravation of the epidemiological situation, the measures adopted in this context have been reassessed to attend to the specific needs of the affected sectors and for the adjustment of the response measures to make sure the measures in place are adequate and proportionate to the current situation.

Accordingly, on 15 January 2021, Council of Ministers Resolution no. 4-A/2021 (i) broadened the scope of Programa APOIAR – which has already been implemented, (ii) establishes a program to support the cultural sector, and (iii) establishes support facilities for social and solidarity sector. Subsequently, Council of Ministers Resolution no 33-A/2021 determined, among others, the extension of the Programa APOIAR to economic activities directly affected by the suspension and closure of facilities and establishments determined by the law regulating the state of emergency, namely bakery, pastry making and manufacture of pyrotechnic articles, as well as the increase of the maximum limits of support in the case of companies with turnover losses exceeding 50%, with retroactive effect.

 

What measures have been approved under the program to support the cultural sector?

Theprogram to support the cultural sector established a set of measures aiming to mitigate the impacts of the pandemic crisis in the sector, such as:

  1. Support, in the form of a non-repayable grant, to entities that operate live and independent movie theatres and to producers, promoters and agents of artistic events, in an amount corresponding to part of the decreasing invoicing registered in 2020 when compared to 2019, with a scheduling commitment, which can be executed in physical or digital contexts; and
  2. Support, in the form of nonrecoverable loan, for individuals and entities of all artistic sectors, for cultural activities, which may include physical or digital displays, and the respective remuneration for their artistic and technical work, taking into account the restrictions on the activity of the artistic and cultural areas arising caused by the epidemiological outbreak.

The measures approved under the program to support the cultural sector are to be implemented right away. The Minister for Culture is responsible for the implementation, monitoring and assessment of said measures.

 

What measures have been approved under the support facilities for social and solidarity sector?

Taking into account the new restrictions prompted by the aggravation of the epidemiological situation, the following measures have been approved to support the social and solidarity sector:

  1. Financial contribution from social security of suspended social responses and residential social responses for the elderly and people with disabilities, regardless of attendance, and reinforcement in situations of home support;
  2. Automatic deferral of reimbursements to the Solidarity Sector Restructuring Fund (Fundo de Reestruturação do Setor Solidário (FRSS)) and extension of deadlines;
  3. Extension of the deadline for annual reporting;
  4. Reinstatement of Programa Adaptar Social +;
  5. Reinforcement of rapid intervention teams;
  6. Extension of the COVID 19 Support Facility for the Social Sector.

TheMinister for Labour, Solidarity and Social Security is responsible for the implementation, monitoring and assessment of said measures.

 

What measures were approved under Programa APOIAR?

Programa APOIAR is structured in four measures:

  1. APOIAR.PT;
  2. APOIAR RESTAURAÇÃO;
  3. APOIAR + SIMPLES;
  4. APOIAR RENDAS.

 

Support and financing rates under Programa APOIAR

Under Programa APOIAR all support is granted through non-refundable grants.

Under measures APOIAR.PT and APOIAR RESTAURAÇÃO, the financing rate is equal to 20% over the enterprise's turnover reduction, calculated in accordance with the eligibility criteria established for each of the measures.

In the specific case of the support granted under APOIAR.PT, the financing rate can go up to €10,000 for micro-enterprises , up to €55,000 for small enterprises and up to €135,000 for medium enterprises and for the enterprises referred to in paragraph 2 below, for companies with a decrease in invoicing reported to the Tax Authorities in the e-Fatura system between 25% and 50% and €5,000 for micro companies, €82,500 for small companies and €202,500 for medium-sized companies and for the companies referred to in paragraph 2 below, for companies with a decrease in invoicing reported to the Tax Authorities in the e-Fatura system of more than 50%. For those micro and small enterprises whose main activity is administratively shut down, listed under Activity Codes (CAEs) 56302, 56304, 56305, 93210 and 93294, such limit goes up to €55,000 for micro-enterprises and up to €135,000 for small enterprises, for companies with a decrease in invoicing reported to the Tax Authorities in the e-Fatura system between 25% and 50% and €82,500 for micro-enterprises and €202,500 for small enterprises, for companies with a decrease in invoicing reported to the Tax Authorities in the e-Fatura system of more than 50%.

Regarding the measure APOIAR RENDAS, the financing rate to be granted is of (i) 30% of the monthly rent reference value, up to a maximum limit of €1,200 per month and per establishment, for a six months period in case of enterprises which reported a 25% to 40% breakdown of their invoicing to the Tax Authorities in the e-Fatura system determined under the terms of the Programa APOIAR Regulations, and, (ii) 50% of the monthly rent reference value, up to a maximum limit of €2,000 per month and per establishment, for a six months period in case of enterprises which reported a breakdown of over 40% on their invoicing to the Tax Authorities in the e-Fatura system determined under the terms of the Programa APOIAR Regulations.  The support granted under APOIAR RENDAS cannot exceed the maximum limit of €40,000 per enterprise.

Under APOIAR + SIMPLES there is a 20% financing rate over the amount of the enterprises invoicing  breakdown, calculated under the terms of the Programa APOIAR Regulations, and can go up €4,000 per enterprise, and up to €10,000  for those enterprises whose main activity is administratively shut down, and listed under Activity Codes (CAEs) 56302, 56304, 56305, 93210 and 93294.

Cash flow support in the form of outright grants was also extended to individual business owners without organised accounting, even if they have no employees, under the APOIAR RENDAS and APOIAR + SIMPLES measures.

As extraordinary support to maintain the activity in the 1st quarter of 2021, a support equivalent to the incentive corresponding to the 4th quarter of 2020 will be granted.

All the support granted under Programa APOIAR may be combined with other incentives and public support, and the total aggregate support must comply with the European thresholds applicable to State aid schemes.

 

Who can benefit from APOIAR.PT?

The following entities can benefit from APOIAR.PT:

  1. SMEs of any nature whatsoever and established under any legal form, as defined in the Programa APOIAR Regulations;
  2. Enterprises of any nature whatsoever and established under any legal form which,  regardless of not being SMEs due to the fact that they employ over 250 people, have an annual turnover under 50 million euros, calculated in accordance with the definition thereof contained in the Programa APOIAR Regulations.

Council of Ministers Resolution no 33-A/2021 has determined the extension of this measure to other contractual forms whose end is the use of real estate.

Beneficiaries must meet the eligibility criteria set forth in the the Programa APOIAR Regulations (as amended). Such criteria include, briefly, the following for each enterprise, which, in turn, must:

  • Be validly existing as at 1 January 2020;
  • Develop a main activity listed under the Activity Codes List (CAE) and be in operation;
  • Be under the organized accounting scheme, under the terms permitted by the applicable law;
  • Have positive equity capital as at 31 December 2019, except in the case of enterprises which started business after 1 January 2019 or provide evidence of capitalization, through new capital contributions (equity capital, incorporation of shareholder loans and/or supplementary capital instalments), certified by a certified accountant, which allows the cancellation of the negative equity value existing as at 31 December 2019;
  • Have, when applicable, an Electronic Certification evidencing the micro or small enterprise status, under the applicable law in force;
  • Report a breakdown of the monthly invoicing to the Tax Authorities in the e-Fatura system of, at least, 25% in 2020, compared to the previous year, or, in the case of enterprises which started business in 2019, report a breakdown of the monthly average invoicing to the Tax Authorities in the e-Fatura system of, at least, 25% in 2020, compared to the monthly average of the period of activity until 29 February 2020, where only full calendar months are taken into account.
  • Submit a statement signed by a certified accountant responsible for the enterprise's accounts, evidencing the breakdown registered in the enterprise's invoicing, in 2020, compared to previous year, or, in the case of enterprises which started business in 2019, compared to what results from the application of the monthly average determined under the terms of the previous paragraph to the 12-month period;
  • Be in good standing in what comes to refunds, within the framework of the ESIF financing schemes;
  • Have no debts towards the Tax Authorities and Social Security, to be verified by the time of confirmation of the term of acceptance.
  • In the case of medium-sized enterprises and enterprises referred to in paragraph 2 above, not being an enterprise “in difficulty” as at 31 December 2019, as such term is defined in paragraph 2 of Regulation (EU) No. 651/2014 of 16 June 2014;
  •  In the case of the enterprises referred to in paragraph 2 above, provide evidence that they met the turnover criteria in 2019.

 

Who can benefit from APOIAR RESTAURAÇÃO?

The following entities can benefit from APOIAR RESTAURAÇÃO:

  1. SMEs of any nature whatsoever and established under any legal form, as defined in the Programa APOIAR Regulations;
  2. Enterprises of any nature whatsoever and established under any legal form which,  regardless of not being SMEs due to the fact that they employ over 250 people, have an annual turnover under 50 million euros, calculated in accordance with the definition thereof contained in the Programa APOIAR Regulations.

Beneficiaries must meet the eligibility criteria set forth in the the Programa APOIAR Regulations (as amended). Such criteria include, briefly, the following for each enterprise, which, in turn, must:

  • Be validly existing as at 1 March 2020;
  • Develop a main activity listed under the Activity Codes List (CAE) and be in operation;
  • Have its registered office located in the municipalities on Portuguese mainland territory covered by the suspension of activities, under the applicable legal terms;
  • Have been covered by the suspension of activities during the relevant period for the assessment and grant of the support;
  • Be under the organized accounting scheme, under the terms permitted by the applicable law;
  • Have not been subject to insolvency proceedings and have not received rescue or restructuring support;
  • Have positive equity capital as at 31 December 2019, except in the case of enterprises which started business after 1 January 2019 or provide evidence of capitalization, through new capital contributions ( equity capital, incorporation of shareholder loans and/or supplementary capital instalments), certified by a certified accountant, which allows the cancellation of the negative equity value existing as at 31 December 2019
  • In the case of medium-sized enterprises, and those enterprises referred to in paragraph 2 above, they cannot be an enterprise “in difficulty” as at 31 December 2019, as such term is defined by law;
  • Have , when applicable, an Electronic Certification evidencing the PME status, under the terms of the applicable law;
  • Report a breakdown of the monthly invoicing to the Tax Authorities in the e-Fatura system of, at least, 25% in 2020, compared to the previous year, or, in the case of enterprises which started business in 2019, report a breakdown of the monthly average invoicing to the Tax Authorities in the e-Fatura system of, at least, 25% in 2020, compared to the monthly average of the period of activity until 29 February 2020, where only full calendar months are taken into account;
  • Be in good standing in what comes to refunds, within the framework of the ESIF financing schemes;
  • Have no debts towards the Tax Authorities and Social Security, to be verified by the time of confirmation of the term of acceptance;
  • In the case of the enterprises referred to in paragraph 2 above, provide evidence that they met the turnover criteria in 2019.

 

Common restrictions applicable to beneficiaries of APOIAR.PT and APOIAR RESTAURAÇÃO

During the period in which the support is granted, starting from the date of submission of the application, and within 60 business days following the submission of the request for final payment, the beneficiaries are not allowed to:

  • Distribute profits and dividends, in any way whatsoever;
  • Terminate contracts of employment under the terms of collective redundancy, dismissal for job termination, or dismissal for unsuitability, or initiate the relevant proceedings, in accordance with the applicable legislation;
  • Terminate their business activity.

 

Who can benefit from APOIAR + SIMPLES?

Individual entrepreneurs which are not covered by the organized accounting scheme, regardless of whether they have employees, can benefit from APOIAR + SIMPLES.

Beneficiaries must meet the eligibility criteria set forth in the the Programa APOIAR Regulations (as amended). Such criteria include, briefly, the following for each enterprise, which, in turn, must:

  • Have reported to the Tax Authorities the beginning or resumption of their activity until 1 January 2020;
  • Develop a main activity listed under the Activity Codes List (CAE) and be in operation;
  • Have an electronic certification evidencing the PME status, under the terms of the applicable law;
  • Report a breakdown of the monthly invoicing to the Tax Authorities in the e-Fatura  system of, at least, 25% in 2020, compared to the previous year, or, in the case of enterprises which started business in 2019, report a breakdown of the monthly average invoicing to the Tax Authorities in the e-Fatura  system of, at least, 25% in 2020, compared to the monthly average of the period of activity until 29 February 2020, where only full calendar months are taken into account;
  • Submit a statement evidencing the breakdown registered in the enterprise's invoicing in 2020, compared to previous year, or, in the case of enterprises which started business in 2019, compared to what results from the application of the monthly average determined under the terms of the previous paragraph to the 12-month period;
  • Be in good standing in what comes to refunds within the framework of the ESIF financing schemes;
  • Have no debts towards the Tax Authorities and Social Security, to be verified by the time of confirmation of the term of acceptance;
  • Employ subordinate workers at the time of the application.

 

Who can benefit from APOIAR RENDAS?

The following entities can benefit from APOIAR RENDAS:

  1. SMEs of any nature whatsoever and established under any legal form, as defined in the Programa APOIAR Regulations;
  2. Enterprises of any nature whatsoever and established under any legal form which,  regardless of not being SMEs due to the fact that they employ over 250 people, have an annual turnover under 50 million euros, calculated in accordance with the definition thereof contained in the Programa APOIAR Regulations.

Beneficiaries must meet the eligibility criteria set forth in the the Programa APOIAR Regulations (as amended). Such criteria include, briefly, the following for each enterprise, which, in turn, must:

  • Be validly existing as at 1 March 2020;
  • Develop a main activity listed under the Activity Codes List (CAE) and be in operation;
  • Be part as tenant in a  lease agreement duly reported to the Tax Authorities, with effects as of 13 March 2020, there being no effective cause for its termination by the time of the application;
  • Not be subject to insolvency proceedings and nor have received any restructuring support;
  • Have positive equity capital as at 31 December 2019, except in the case of enterprises which started business after 1 January 2019 or provide evidence of capitalization, through new capital contributions ( equity capital, incorporation of shareholder loans and/or supplementary capital instalments), certified by a certified accountant, which allows the cancellation of the negative equity value existing as at 31 December 2019;
  • In the case of medium-sized enterprises, and those enterprises referred to in paragraph 2 above, they cannot be an enterprise “in difficulty” as at 31 December 2019, as such term is defined by law;
  • Have, when applicable, an Electronic Certification evidencing the PME status, under the terms of the applicable law;
  • Report a breakdown of average daily invoicing to the Tax Authorities in the e-Fatura  system on the days in which the suspension was in place, compared to the average daily invoicing reported on the weekends from 1 January 2020 to 31 October 2020 or, in the case of enterprises established in 2020, the period of activity up until 31 de October 2020;
  • Submit a statement signed by a certified accountant responsible for the enterprise's accounts, evidencing the reduction registered in the enterprise's invoicing, on the days covered by the suspension;
  • Be in good standing in what comes to refunds within the framework of the ESIF financing schemes;
  • Have no debts towards the Tax Authorities and Social Security, to be verified by the time of confirmation of the term of acceptance;
  • In the case the enterprises referred to in paragraph 2 above, submit a statement evidence the turnover volume amount registered in 2019, or in the case of enterprises which started business after 1 January 2020, report a monthly average turnover under 4.2 million euros in 2020.

 

What process should I follow to access the measures under Programa APOIAR?

To access the measures set forth in APOIAR, beneficiaries must submit their application under the call for applications published by the Managing Authority for the Operational Programme for Competitiveness and Internationalisation, which is submitted using the simplified electronic form available at Balcão 2020.

Applications from a single beneficiary to the Programa APOIAR, both for APOIAR.PT and APOIAR RESTAURAÇÃO, may be submitted at the same time, following the instructions in the call for applications.

Applications are decided upon within 20 days of the date of submission (excluding the time limit for replying to the clarifications requested) and shall expire when acceptance is not confirmed by the beneficiary within a maximum of 30 days from the date of notification of the decision, except for justified reasons, not attributable to the beneficiary and accepted by the managing authority, or in case there is no decrease in invoicing in accordance with the Programa APOIAR Regulations, following a  consultation with the Tax Authorities in the e-Fatura system.

 

Grace period and maturity of credit facilities with public guarantee

As a result of the amendments introduced by Decree-Law 22-C/2021, of 22 March, the grace period and maturity of credit facilities with public guarantee was extended as follows:

  1. The credit operations benefiting from guarantees granted by mutual guarantee companies or by the Mutual Counter-Guarantee Fund, concluded between 27 March 2020 and 23 March 2021, under the various protocols entered into between Banco Português de Fomento, S. A. (at the time, SPGM - Sociedade de Investimento, S. A.), the acceding credit institutions and the mutual guarantee companies (Protocols), may benefit from an extension of up to nine months of the grace periods of the contracted credit operations.
  2. As a general rule, the nine-month extension is effective upon notice of accession by the borrower to the banking institution by 31 March 2021. The extension is deemed to have been accepted, there being no need to notify the bank of the accession, in the case of borrowers whose main activity is included in the list of economic activity codes (CAE) in the annex to Decree-Law 22-C/2021, of 22 March (available here, which includes accommodation, restaurant and similar activities, air transportation activities, and many others). A borrower may rebut such presumption by notifying the banks until 31 March 2021. Any borrower may, even after 31 March 2021, benefit from the extension of the grace period and associated extension of maturity for a period of less than nine months, by notifying the banking institution of such intention no later than 30 days prior to the intended effective date;
  3. When applicable, the extension of the grace period is accompanied by an extension of the respective maturity for the same period, provided that, the total maturity of such credit operation does not exceed the respective maximum term specified in the Protocols, and the conditions of the credit operations are adjusted to comply with the conditions specified in the applicable Protocols.
  4. When the grace period is extended under the terms referred to above, all elements associated with the relevant credit operations, including guarantees and counter-guarantees, are also extended, with waiver of the applicable legal procedures.
  5. The above amendments are also applicable to credit operations concluded between 27 March 2020 and 23 March 2021, even if the grace period was not specifically provided for or, in case it was, it has already elapsed. In this case, the grace period is extended for an additional period, along with the respective maturity, which shall be extended for an identical period. Such additional period will commence as at 23 March 2021, and, during such period, any enforcement actions for the payment of any principal in arrears as of March 23, 2021, and associated contractual penalties are suspended.

The members of the Government responsible for the areas of economy and finance are responsible, for identifying the Protocols covered by this regime, by means of a ministerial order. In particular, ministerial order 3191-b/2021, has identified the following facilities covered by the Protocol: a) AND 2018; b) AGRO GERAL; c) AGRO JOVENS; d) Apoiar Madeira 2020; e) Apoio Economia COVID-19; f) Apoio Revitalização Empresarial; g) Apoio Sector Social COVID-19; h) Capitalizar; i) Capitalizar 2018; j) Capitalizar Mais; k) Capitalizar Turismo 2018/2019; l) Descarbonização e Economia Circular; m) Ensino Superior 2018; n) Garantias financeiras COVID-19; o) Geral; p) Investe RAM 2020; q) Investe RAM COVID 19; r) Linha de Apoio à Economia COVID19 - MPE; s) Linha de Apoio ao Empreendedorismo e à Criação do Próprio Emprego; t) Linha Específica COVID 19 - Açores; u) Programa Operacional da Economia/Programa Quadro de Inovação Financeira; v) RAM PME Madeira II; w) Regressar; x) Seca 2017; y) Social Investe; z) Apoio Economia COVID 19 - Empresas Exportadoras da Indústria e do Turismo; aa) Apoio Economia COVID 19 - Empresas de Montagem Eventos; bb) Apoio Economia COVID 19 - Agências de Viagens e Operadores Turísticos.

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.